The deal is subject to customary closing conditions. Credit: Saudi Arabian Oil Co.

Aramco has agreed to purchase a 50% equity stake in Blue Hydrogen Industrial Gases Company (BHIG), a subsidiary of Air Products Qudra (APQ). 

The agreement is part of Aramco’s initiative to broaden its range of alternative energy solutions and establish a lower-carbon hydrogen business. 

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It also includes an option for Aramco to offtake nitrogen and hydrogen. 

Aramco anticipates that its investment in BHIG will help it establish a lower-carbon hydrogen network in the Eastern Province of Saudi Arabia, catering to both local and regional clients. 

Once the transaction is finalised, Aramco and APQ, a joint venture between Air Products and Qudra Energy, are anticipated to hold equal 50% shares in BHIG. 

BHIG is designed to generate lower-carbon hydrogen while capturing and storing carbon dioxide, and it aims to begin commercial operations in alignment with Aramco’s carbon capture and storage activities. 

Aramco executive vice-president of strategy and corporate development Ashraf Al Ghazzawi said: “This investment highlights Aramco’s ambition to expand its new energies portfolio and grow its lower-carbon hydrogen business.  

“We intend to leverage our growing capabilities in carbon capture and storage (CCS), as well as our technical expertise in hydrogen, with the ambition to support the establishment of a vibrant marketplace for lower-carbon hydrogen – helping lay the foundations of a future energy system.” 

Air Products Qudra chairperson Samir Serhan said: “It is an honour to further extend Air Products Qudra’s strong partnership with Aramco, working to accelerate the hydrogen economy and driving the creation of the largest hydrogen network in the Middle East, which is expected to serve the refining, chemical, and petrochemical industries.  

“We look forward to providing our expertise in hydrogen and pipeline operations and supporting Aramco’s need for a reliable supply of lower-carbon hydrogen for domestic and regional requirements.” 

The deal is subject to customary closing conditions.  

Recently, Aramco awarded contracts exceeding $25bn to further its strategic gas expansion. 

The company aims for over a 60% increase in sales of gas production by 2030 over 2021 levels. 

The contracts were related to the second-phase development of the Jafurah gas field, the third-phase expansion of the company’s Master Gas System, and the acquisition of new gas rigs along with capacity maintenance.